Jun 5, 2015

I Think I Know Why Eric Conn Hasn't Been Prosecuted -- He's A Doofus

     I can't remember much from my law school class on criminal law but I do remember that prosecuting someone for fraud is awfully difficult. You have to prove that the defendant intended to deceive, did deceive and that the deception caused harm. That's a lot to prove beyond a reasonable doubt. Let's look at some of the problems involved in prosecuting Eric Conn for fraud.
     Was Social Security really deceived? Social Security's Administrative Law Judges (ALJs) aren't stupid. When they see the same type of odd-looking evidence submitted repeatedly they ask questions. They also tend to come to conclusions about that evidence. In my book, I advise against attorneys sending all their clients to one physician for medical examinations. Even if everything is above board, this looks bad to ALJs. They heavily discount the evidence. In Conn's case, I would hazard a guess that the ALJs who were receiving the medical "reports" that Conn is alleged to have submitted would testify that they knew the reports were bogus and paid no attention to them. If you wonder why Social Security couldn't recognize that Conn was acting fraudulently, maybe the answer is that they did realize it but thought what Conn was doing was a farce. Conn wasn't winning because of the allegedly phony reports but despite them.
     Can what Conn is alleged to have done be considered deceptive when it is little different than what Social Security does routinely? Most Social Security disability claim files at the hearing level contain "opinions" offered by physicians at the initial and reconsideration levels. These physicians never see the claimants. The opinion forms are usually filled out by a non-physician disability examiner and then routinely signed off on by the physician. Workloads are such that it is impossible for the physicians to actually review the medical evidence in most cases. The physicians or, more accurately, the disability examiners rely upon Social Security RFC (Residual Functional Capacity) guidelines in filling out the forms. In theory, the RFC guidelines don't exist. Social Security denies that they exist. Yeah, right. Does Social Security want some of these physicians on the stand testifying under oath about the RFC guidelines? Not only do the opinions of Social Security's physicians appear in the files but Social Security has told ALJs that these physicians are "experts" whose opinions must be considered and that their opinions may be entitled to more weight than that given to the opinions of treating physicians. How is what Social Security does any different than what Conn is alleged to have done, other than the fact that Conn, unlike Social Security, was in no position to demand that ALJs treat the opinions with more respect than they deserved?
     Would the decisions have been any different if Conn had not submitted the questionable opinions? Much attention has been paid to the fact that ALJ David Daugherty was approving essentially all of Conn's clients. Little attention has been paid to the fact that Daugherty was approving essentially all of every other attorney's clients as well. No one is alleging that the other attorneys were submitting the same sort of medical reports that Conn is alleged to have submitted. I think a jury would probably conclude that the questionable opinions were of no consequence; Daugherty would have approved the cases without the opinions Conn submitted.

     To me, Conn doesn't look like a criminal. He looks like a doofus whose only real skill is self-promotion. He couldn't figure out that his silly scheme was ineffective and would look criminal to a many people.

31 comments:

Anonymous said...

Good points! I had not considered the close similarities between what Conn is alleged to have done and how SSA works with its own contracted non-examining physicians.

Dan Smith said...

I don't really agree with your comparison and characterizations here, but more to the point, wasn't there an allegation that Conn's doctors were filling these reports out even for claimants who didn't even show up to their appointment? If established, how does Conn wiggle out of that?

Anonymous said...

Conn intended to deceive SSA, did deceive the claimants and the harm was caused when SSA summarily cut off their benefits?

Anonymous said...

Dan,

SSA non-examining physicians are filling out forms regarding claimants they never saw, often parroting what the adjudicators have communicated to them. They have ex-parte communications with the adjudicator in which the claimant and claimants rep are excluded. There are at least some incentives for the physicians to make findings consistent with a denial because SSA's internal quality review selection of cases at initial and recon are much more frequently of approvals rather than denials. Any such comparison will never be exact, but it is actually a remarkably close in this case.

Anonymous said...

Great perspective Charles. I would differ in a few areas - wasn't Daugherty paid large sums on a personal bank account? If so fraud would be a viable charge. On your other points, you are right SSA rubber stamped these decisions. The agency started to increase their review of ALJ allowances, but that only demonstrated what a worthless waste of money the Appeals council is. And, not so sure Conn was a doofus - he made 22 million simply using SSA policies. IMO, this was primarily SSA's mismanagement from beginning to the unfortunate end, including apparent suicides.

Anonymous said...

I don't buy the argument that Conn was "just doing what SSA does" with the doc reports. Like it or not, as an attorney, he is held to a higher ethical standard than a governmental agency like SSA. His scam was clearly unethical for a lawyer, even though it mirrored SSA's own practices. With hard work and a good business plan, one can make a good living representing disability claimants playing by the rules. I agree with Charles that he didn't need to do this - he was greedy. His actions and accompanying Congressional blowback may end up hurting all of us and our clients.

Anonymous said...

9:16 AM - I don't remember seeing anything connecting Daugherty bank deposits to Conn. Is there new information on this?

Anonymous said...

This touches on something I've always wondered, but after nine years, haven't found the answer to. What and where actually lays out the mechanics of how SS comes up with the RFC?

Johnny Cash said...

Daugherty and daughter had large cash deposits. http://www.hsgac.senate.gov/download/staff-report_-how-some-legal-medical-and-judicial-professionals-abused-social-security-disability-programs-for-the-countrys-most-vulnerable-a-case-study-of-the-conn-law-firm

Anonymous said...

My guess is Conn won't be prosecuted for simple (mail/wire) fraud, he'll be prosecuted for conspiracy and RICO violations.

Anonymous said...

I don't understand how anyone justifies these "questionable" cash deposits Daugherty made as proof of a payoff. It just isn't logical that the two were involved in a scheme together and Conn makes 22 million, the doctors get fees of around a million each (more or less) and the the ALJ somehow gets less than a hundred thousand as his "cut?"

The entire thing is crazy...but I'm pretty sure the ALJ could do basic math.

Anonymous said...

11:35, you skirted my question. How do you know the deposits came from Conn?

Johnny Cash said...

It is very apparent from the frequency with which the topic always goes to comparing what Conn is alleged to have done to the DDS docs that there are a Conn defenders trolling the site.

As to how anyone knew the deposits came from Conn, it's just another piece of circumstantial evidence. Cases are made, people convicted and folks sentenced based on an accumulation of circumstantial evidence everyday. The "DB" lists, the burning of computer hard drives, the sham reports, the large unexplained deposits of cash. Put it all together and I think you build a strong case at least to support an ethical violation and prohibit Conn from practicing before the agency. May take a little more connections of the dots to take away his liberty via a criminal conviction.

Anonymous said...

...Conn defenders trolling the site.

So, if one has an opinion different from yours they are trolling?

A little critical thinking never hurt anyone. There are so many other things that come in to play here aside from the Senate Report and all of that "circumstantial evidence" (including the employee affidavits, the bank deposits, Amy Daugherty's campaign contributions...etc) has yet to withstand any scrutiny whatsoever.

Anonymous said...

There's been no shortage of allegations but we have yet to see any real action. It is good that Social Security has changed course and recognized that the snap reaction of suspending benefits for more than 900 people is grossly unfair. Let us hope that a bit more thought is put into where this goes from here.

Anonymous said...

What I think Charles is missing here is that Daugherty would tell Conn or Conn's staff what medical opinions he needed to pay the case on "DB lists" for upcoming hearings. Conn's office and Daugherty had these conversations at least monthly regarding upcoming hearings. Conn would then pay one of his quack doctors to sign a MSS that Conn's staff already filled out. These MSS's were not MSS's. Sen. Coburn's staff reviewed them and discovered that there was only 10 or so versions of the MSS's that Conn's staff filled out and just gave to one of Conn's doctors to sign. Once this got in the file, the case went before Daugherty and he paid it giving controlling weight to these MSS's. Another thing is that Daugherty would steal cases of Conn's from other judges' dockets and reassign them to himself. If it can be proven that Daugherty's mystery cash came from Conn, then both of them could easily be prosecuted for conspiring to and actually defrauding the agency.

Anonymous said...

This is 2:05 again

"Would the decisions have been any different if Conn had not submitted the questionable opinions?"

Sorry to be repetitive, but Daugherty would tell Conn what MSSs he needed in advance to pay the cases, and used those sham MSSs Conn paid off quack doctors to write, and gave them controlling weight in his decisions. Many of these cases he paid OTR as soon as the sham MSS came in.

"Much attention has been paid to the fact that ALJ David Daugherty was approving essentially all of Conn's clients. Little attention has been paid to the fact that Daugherty was approving essentially all of every other attorney's clients as well."


Yes, but a big issue is how Conn was able to get so many of his cases in front of Daugherty. Daugherty would often go into the master docket at the Huntington ODAR and take cases of Conn's from other judges and put them in his name. What quid pro quo was arranged to make sure this happened is speculation at this point, but there is the issue of unexplained cash. If this cash is traced to Conn, I think the case will be complete.

This part is my own speculation. My guess is that Conn started off a legitimate law practice, and saw he had a way to guarantee wins if he was able to get his cases in front of Daugherty. I'm guessing that he got crooked over time in that he somehow ingratiated himself with Daugherty and gain his trust. Once that was done, Conn was able, probably through some type of bribery or quid pro quo, to get Daugherty to assign Conn's cases to himself and pay them, and even get a system set up whereby Daugherty would tell Conn in advance what type of evidence he needed in the file so that he could easily pay the case in case.

I agree with Charles and others that the Agency really dropped the ball here. The higher ups knew Daugherty was just indiscriminately paying huge numbers of cases every year, but so long as the backlog was going down, they didn't ask any questions. Other judges raised an issue with Daugherty taking cases out of their name and took them to higher ups, but nothing was done. I mean, this scam pretty much happened right out in the open, and the agency didn't react until it was publicly embarrassed by that WSJ article.

Anonymous said...

2:05 again. I wish there was a way to edit posts on this blog!

Shameless Trolling said...

Local to this situation, I think it is important to know the actual people involved. Daugherty was a mean old man. He didn't get close to anyone and usually swore at you through the entire hearing. There was no ingratiating yourself with Daugherty.

When an ALJ requests anything from an attorney, most consider it prudent to comply. As these were non-adversarial proceedings, he was certainly able to make his requests as to how he wanted a case presented and as an attorney, it was in your client's best interest to comply. That is not a scheme, that is good business practice. Zealous representation if you will.

To my (albeit limited) understanding, Conn had over 60% of the case volume being processed in this area. It is not unreasonable to surmise that practically every judge in that office heard more Conn cases than any other attorney. More over, there were several other local attorneys who received the same grant rate from Daugherty. They also had clients evaluated by these same physicians.

With so many similarities...if one should not compare SSA's own practices in evaluating a claimant to Conn's (apples to oranges was the term, I think), then one could at least compare the practices of other high volume firms local to the Huntington ODAR.

Incidentally...as Daugherty's daughter was mentioned in previous comments, you might find it interesting reading as to which Kentucky attorneys did contribute to her campaign for magistrate in West Virginia.

Anonymous said...

Hey 2:05. You mention that Coburn's staff found only about 10 versions of RFC's completed by Conn's MDs. If you add up all the DDS Md's throughout the country I don't think you would even find 10 distinct versions used by them all conbined. So your point really doesn't prove anything.

Anonymous said...

How long do u think we can keep checks.

Anonymous said...

How long do u think we can keep checks.

Anonymous said...

@8:31

in my State I see a variety, well-tailored to the claimant's impairments. Many more than 10 versions. Also, there are versions I don't see--you know, the 35 percent of cases DDS pays that I never see here at ODAR ;)

DDS has its flaws, but please stop bashing them as though they are some sort of mill spewing out determinations to not pay claimants. We have all types at DDS, SSA, and ODAR--from the most pro-claimant you'll ever meet, to tea party types who seem to loathe most everyone who applies. And each category is well-represented. Our workers, on the whole, don't have any clear bias in their decision making--for every bleeding heart 98 percent payer ALJ, there's a Swank. Most of us are in the middle. Claimant's reps are 100 percent trying to show each and every client is disabled, and some of those reps aren't the most scrupulous. So please, tell me how SSA, with its huge, varied workforce, is somehow clearly anti-claimant or prone to UF determinations/decisions whereas reps and claimant's are completely pure in motive and unbiased in their actions.

Anonymous said...

That's the thing. No one is "pure in motive or completely unbiased in their actions."

Disability is subjective. Claimant believes he is disabled. Rep evaluates claim and accepts and as an attorney it is his job and duty to take all prudent measures to prove disability. As for SSA/DDS/ODAR/ALJ - They come in all shapes and sizes as well with their own prejudices and personal opinions and political stances. While there are certain standards that must be met to qualify as disabled, the human element remains. It's easy to make one person or one group (claimants, reps, SSA, ALJs) the villain in the plot line.

Anonymous said...

When attacking DDS, remember that they paid about a third of claims initially or on reconsideration, translating to about a million new beneficiaries a year in recent years. ODAR does not even process a million total claims in a year. Therefore, the DDS doctors are coming up with favorable RFCs for quite a few people.

Also, a big difference between DDS RFCs and the RFCs obtained from treating doctors by representatives is that DDS RFCs tend to give generalized opinions, especially with exertional abilities. The person can stand/walk less than two hours OR at least two hours OR about six hours. Those are conclusions that can reasonably be drawn by reviewing medical records and claimant statements.

The forms that attorneys have created for doctors to create often ask the doctor to opine how long the person can stand at one time, sit at one time, walk at one time. That is not information that the vast majority of treating doctors are going to know, certainly not the family doctor. Do any of you honestly believe that your family doctor or even your orthopedist or cardiologist or neurosurgeon (if you have any of these specialists), based on their examinations of you, can honestly say that you can walk for twenty minutes at one time rather than thirty minutes or an hour or only ten minutes?

DDS RFC -- manipulative -- never, occasional, frequent, constant
Attorney created forms -- what percentage of workday can patient use right arm for reaching, left arm for reaching, right arm for handling, etc. Once again, the generalized conclusions can be reasonably reached by reviewing medical records and claimant statements [which is not to say that DDS always reaches the "correct" conclusion -- I have seen some truly idiotic DDS assessments]; however, unless the doctor has actually performed a FCE or has access to the report from a recent FCE, he has no clue what percentage of the day a person can use each arm to perform a particular manipulative task.

Anonymous said...

I was a medical school professor and biomedical scientist before changing careers to become an attorney who then stumbled into disability practice. Early in my career, I asked a client's physician about the client's lifting capabilities, and he commented, "How the heck should I know? I haven't tested that."

The doctor was absolutely correct, but at least he had the advantage of having treated the claimant over a long time period and had actually SEEN the claimant. None of the Agency reviewing physicians have those advantages. 7:56 above, you give DDS and its reviewers too much credit--medical science has not yet advanced to the point that a review of the records can reliably determine physical capacity. Even FCE's are unreliable--most protocols test the claimant for about 2 hours over 2 days and then extrapolate as to what the claimant can do 8 hours/day for 5 days/week without considering the resultant physical effects on the claimant. Perhaps the DDS from which your cases come is different, but I cannot believe how my state's DDS keeps denying MS cases with objective MRIs showing obvious paraventricular white matter lesions and treating physician (and even a few CE) records with clear functional deficits.

To 4:43, I disagree that DDS reviewers have some special insight that the treating physician does not. The questions which you see on attorney-prepared forms are based on questions asked by ALJs at hearings and on actual evidence which seems to impress ALJs and VEs, otherwise, those questions would not be asked.

11:08 is correct in that disability is SUBJECTIVE. Unfortunately, in the last 2 years, with ALJs responding to pressure from Congress and recruitment of ALJs from within the bowels of SSA (where there appears to be an alternate universe from that in which the rest of us live), the disability system has lost all consistency. I find that I honestly have to tell my clients that a bigger factor than the evidence within their medical records and other application materials is which ALJ gets assigned to their case in 2 1/2 to 3 years from the time when they appear in my office to seek representation. From my perspective of 26 years of practice, it appears that pressure is being put on ALJs so that ALL of them will eventually allow benefits in only 20% of their cases.

Anonymous said...

Maybe I am missing the point of the investigation.

Thought Conn was charged w/
1. Paying ALJ Daugherty for wins
2. And/or paying doctors for bogus opinions.

This is pretty much a simple case of finding evidence of this. If Conn did this, then intent would be easy to prove at least circumstantial. Doofus or not, he did it.

SSA is probably having trouble garnering enough evidence to convict in front of a jury.

Still think it is funny we have not heard from ALJ Daugherty.

Anonymous said...

If you think Daugherty was not smart enough to hide the money, think some more.
If you think the management at Huntington ODAR did not know what was going on and benefit from it, read the Senete Report again.
If you think Conn was not responsible for falsifiying medical opinion evidence, then you just don't get it.

Anonymous said...

Maybe the ALJ are getting a cut, that's why Conn is getting away with this. I can't imagine how Conn could walk away from this with his law license intact. #scandal

Anonymous said...

Those are reasons Conn should be charged & not be able to practice law! He obviously is complicit in fraudulent behavior!! He destroyed evidence. Obvious guilt!

Anonymous said...

https://secure.ssa.gov/poms.nsf/lnx/0424510000